Are You Saving Smartly? Hear What Top Pension Experts Have to Say – International Edition (English)

As the cost of living has increased in recent times, numerous British individuals find themselves facing difficulties when attempting to set funds aside for their retirement. Concurrently, with lifespans extending, the urgency to save becomes increasingly critical.

A survey conducted by YouGal indicates that 38% of participants in the United Kingdom do not have savings set aside for retirement. Approximately 28% save up to 10% of their yearly earnings for later life, whereas 22% are uncertain about the amount they are presently setting apart.

Although numerous British individuals are preoccupied with present financial stresses, specialists emphasize the significance of participating in pension planning at an early stage. Even small savings, coupled with effective management of those funds, can yield substantial benefits in the long run.

Below are several key suggestions for building your pension, gathered through discussions with financial experts. Although we emphasize UK-based pensions, international readers may find valuable insights here.


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Save as much as you can, as soon as you can.

It might be apparent, yet it bears repeating: increasing your contributions to your pension fund significantly boosts your chances of enjoying an impressive retirement income. Additionally, starting early allows your investments – whether part of a personal or company pension plan – ample opportunity to accumulate over time.

“One effective method to enhance your pension is to maximize your contributions whenever you can,” said Helen Morrissey, who leads retirement analysis at Hargreaves Lansdown, to Farovint.

She pointed out that one approach is to increase your contributions each time you receive a raise.

“You’re not accustomed to having additional funds in your wallet, so it becomes simpler to allocate part of it toward your pension,” Morrissey clarified.

Negotiate with your employer

In the United Kingdom, the majority of workers get automatically signed up for a pension plan. Typically, they contribute 5% of their earnings towards this fund, with employers required to add an amount equaling at least 3%, provided the employee earns more than £6,240 annually.

“Auto-enrollment minimum contributions are set at 8%; this is a positive beginning, but you should aim to contribute even more for a better retirement income,” stated Morrissey.

She mentioned that certain employers may provide higher rates than 3%, potentially even mirroring your contribution levels.

An alternative approach being considered is a salary sacrifice arrangement. Your employer might permit you to decrease your earnings or incentives with the condition that these funds are redirected into a pension plan, supplemented by additional contributions from your employer.

In addition to paying reduced income tax on these funds, both you and your employer will contribute lower amounts towards National Insurance.

Stay engaged and informed

Maintaining control over your pension plan is crucial for accumulating savings, noted Claire Trott, who serves as the divisional director of retirement & holistic planning at SJP.

“At least once a year, assess your current assets, potential future income, and determine if they will suffice for your retirement needs,” she advised.

When dealing with personal and professional financial commitments, an effective approach is to thoughtfully select the destinations of your investments.

Contributions made at work will go into a pooled fund aimed at meeting the needs of everyone, but this might not always be the most suitable choice for you.

“The default fund could align with your goals. However, for most individuals, it’s merely satisfactory. You may find better ways to utilize your funds,” explained Trott.

Utilize various financial instruments.

Setting aside money for your retirement isn’t solely about having a pension fund; various financial products are available to consider.

“Pension investors can additionally leverage their tax-free ISA allowance to complement their pension,” said Lucie Spencer, a partner specializing in financial planning at Evelyn Partners, during an interview with Farovint.

Capital invested… has the potential to expand without being taxed on earnings or profits, making it perfect for retirement planning. Keep in mind though, contributing to a pension plan actually raises your higher-rate tax threshold, thereby decreasing income tax. On the other hand, funds saved in an ISA are taken out of your after-tax salary.

To put it differently, withdrawals from ISAs are not subject to taxation, but the funds deposited into them are taxable.

Hold off on claiming your pension until absolutely necessary.

The age at which you can claim your state pension — distinct from a workplace pension funded by National Insurance contributions — is presently set at 66. However, for individuals born after April 6, 1978, this eligibility age will rise to 68.

Alternatively, you have the option to access a private pension, such as certain occupational pensions, starting at age 55. However, this eligibility will shift to age 57 beginning in April 2028.

Many financial experts advise against withdrawing from your pension prematurely unless necessary. Keeping your pension intact enables it to accumulate more value over time. Additionally, claiming your pension while still working could elevate your tax bracket, and there’s always the danger of depleting your funds too soon.

Think about consolidation options

It’s quite rare nowadays for individuals to remain employed by a single company throughout their entire careers, even though frequently changing jobs can have implications for their retirement planning.

When beginning a new job, your workplace pension does not transfer automatically. This allows you to decide whether to maintain your previous savings account separately from your current one or combine them into one.

“Consolidation makes administration much simpler when you’re ready to take your pension since everything will be in one location,” according to Claire Trott.

Nevertheless, she pointed out that combining pension accounts could result in missing out on benefits exclusive to each plan.

“One specific plan might outperform another. Therefore, if you have an older plan dating back to before 2006, it could offer significant advantages that plans initiated today lack due to legislative modifications,” she explained.

Utilize ‘carry forward’ provisions

Evelyn Partner’s Lucie Spencer similarly suggested that individuals should explore “carry-forward” provisions. These regulations permit investors to utilize unclaimed tax relief from the previous three fiscal years.

You’re permitted to contribute a specific sum to your pension annually without triggering regular income tax rates. For the 2025-26 fiscal year, the basic annual allowance stands at £60,000; however, “carry forward” provisions allow you to augment this limit under certain conditions.

“A substantial bonus could also be utilized towards your pension savings. An individual might possibly contribute up to £220,000 as a gross pension contribution before the close of the tax year on April 5, 2026, provided they haven’t allocated any portion of their pension allowance from the last three years,” Spencer explained to Farovint.

Do not overlook your state pension.

In conclusion, experts emphasized the importance of not overlooking your state pension — keep in mind that you won’t be handling any investments in this aspect.

The sum distributed through a state pension is based on an individual’s National Insurance contribution record, which hinges upon the number of “eligible” years they have been employed.

In order to receive the complete benefit, you must accumulate 35 qualifying years, and you should have a minimum of 10 years to be eligible for some benefits.

“Reviewing your state pension benefits through the HMRC application to identify any discrepancies in your records is crucial,” said Lucie Spencer.

Although the deadline to address discrepancies dating back to 2006 has expired, individuals still have the opportunity to cover up to six previous years’ contributions. This process of retroactively paying for omitted years can significantly enhance one’s retirement funds since the state pension ensures a consistent monthly payment throughout retirement,” she explained.

Although managing the state pension generally demands fewer efforts compared to workplace and private pensions, it remains an essential component of retirement planning.

“Please keep in mind that the content of this article should not be taken as financial guidance; conduct additional research tailored to your individual needs. Additionally, recognize that our platform focuses on journalism with an objective to offer high-quality insights and recommendations sourced from professionals. By using the details provided here, you assume full responsibility for any outcomes.”